The largest logistics company in the world? Amazon!

The logistics industry is becoming more and more technological. The technology provides benefits in terms of cost reduction, increased speed, and serves as an ideal platform for the rapidly evolving e-commerce industry. Amazon, like no other company, uses the latest technologies in its work, including providing for its logistics needs.

Amazon, which started selling books in the 1990s, is now the world’s largest online retailer. The company has changed the face of the retail business, with many companies now moving to e-commerce to sell their products online. Today, Amazon has become not just a seller of all kinds of goods, it has become a marketplace where any supplier can post information about their product and use Amazon’s infrastructure for organizing sales and delivering goods to the buyer. To support these sales, and in an effort to reduce its reliance on third-party logistics service providers, over the past ten years Amazon has become not only the largest online retailer, but also the largest logistics company in the world with the fastest package delivery service to the United States.

Amazon today is 390 warehouses and distribution centers around the world, a third of them in the United States, 32 Boeing cargo aircraft, 300 large-capacity and 20,000 light-duty trucks. Amazon’s logistics division already has 648,000 employees, 50% more than FedEx (450,000) or UPS (481,000). This scale of its own logistics allows Amazon to deliver today about 45% of its parcels on its own, however, such capacities allow us to achieve incredible delivery speeds – less than three days in the United States, Amazon distribution centers send the parcel during the day, which requires competitors from two days or more .

Such a strong logistics infrastructure gives Amazon the opportunity to reduce the cost of shipping, and today launched the Amazon Shipping pilot program, thanks to which Amazon offers shipping costs from 20 to 50 cents cheaper than UPS or FedEX, logistics operators with a long history. Amazon Shipping is not only a lower price compared to traditional carriers for the US market, but also 24/7 pickup and fast delivery.

Of course, today Amazon does not pose any threat to the business of FedEx or UPS, they can only experience a decrease in order volumes from Amazon itself, but the less its impact on many logistics components will be noticeable in the very near future:
Last mile. With such a large fleet of light vehicles, Amazon could eventually become a major player in this phase of delivery and seriously oust its current members, which provide services here not only to Amazon customers.
Wage. By needing a workforce of drivers for its fast-growing delivery needs, Amazon is increasing their wages and thereby having a major impact on the overall job market in this segment of the US economy in the first place.
Amazon not only invests in vehicles itself, but also invites small and medium-sized entrepreneurs with their own fleet of trucks, which, among other things, carry cargo from senders who do not work with the e-commerce giant. Such a symbiosis is mutually beneficial: Amazon reduces the financial burden on the purchase and maintenance of cars, entrepreneurs receive an additional load on their fleet, thereby increasing its utilization rate. As a result, those shippers who use the services of such carriers also benefit, even if they do not sell through Amazon due to the fact that vehicle owners can offer them better prices for transportation, more car recycling reduces delivery times.

In conclusion, all signs point to Amazon taking the logistics business seriously, and competitors are also well aware of the threat that Amazon poses as a logistics provider. The overall impact will be felt in the packaging/courier industry in the coming years, and shippers are likely to benefit from two main aspects in the US: shipping cost and delivery time.